AFE6019 - Economic Model from Macroeconomics - Time Series Graphs - Co Integration - Econometrics Assessment Answer

Assessment Task:

AFE6019 Econometrics Assessment Answer

Q1. Obtain a time-series of 30+ observations, for three variables of your own choosing, for any country. However, the choice of variables should be guided by an economic model from Macroeconomics. These variables should be capable of representing an economic model where one variable (Y ) is deemed to be dependent on the others (Xs are independent variables). Provide full sources and definitions for these series.

Q2. Produce (separate) time-series graphs of these variables in levels and in first differences. Examine these graphs for evidence of drift (trend) or unit-roots.

Q3. Write down fully an estimating equation which represents your underlying economic model (Hint: it may be easier to use natural logs) in the form:

ln Yt = β0 + β1 ln X1t + β2 ln X2t + ut

where t is the time subscript and u is the disturbance term.

Q4. Perform appropriate tests for the presence of a unit root in each of the three series and comment on the findings.

Q5. Estimate your model by OLS and use this to perform a test for co-integration (Do NOT provide a discussion of the standard significance tests for this model)

Q6. Compute the first difference for each time series. Perform appropriate tests for the presence of a unit root in each of the three series in the first differences and comment on the findings. Estimate your model in the first differences:

 ln Yt = β0 + β1 ln X1t + β2 ln X2t + εt

Q7. Given your answers in Q4-Q6, explain whether model (1) or model (2) is more appropriate. Discuss the findings in your preferred equation with respect to the sign, size and statistical significance of the individual coefficients and the overall performance of the model represented by your chosen equation.

This AFE6019: Econometrics Assessment has been solved by our Econometrics Experts at My Uni Paper. Our Assignment Writing Experts are efficient to provide a fresh solution to this question. We are serving more than 10000+ Students in Australia, UK & US by helping them to score HD in their academics. Our experts are well trained to follow all marking rubrics & referencing style.

Be it a used or new solution, the quality of the work submitted by our assignment experts remains unhampered. You may continue to expect the same or even better quality with the used and new assignment solution files respectively. There’s one thing to be noticed that you could choose one between the two and acquire an HD either way. You could choose a new assignment solution file to get yourself an exclusive, plagiarism (with free Turnitin file), expert quality assignment or order an old solution file that was considered worthy of the highest distinction.